Mike believes that in the rest of this decade we’re going to face a crisis the scale of which we’ve never faced before.

A lot of people think that Ben Bernanke got the economy on track and he saved everything by bailing out the banks. Instead we are in the greatest financial emergency of all time.

It took 200 years to go from $0 dollars in existence to roughly $800 billion just before the crisis of 2008.

QE TAPERING

Everyone is talking about the debt ceiling and the government shutdown, but that is not the news. The news is that Ben Bernanke announced last month that they were not going to taper.

Taper means that instead of $85 billion worth of bonds, they might just purchase $84 billion worth of bonds (debt). That’s what they call tapering. Bernanke said they couldn’t even taper.

So every year we are producing over 200 years worth of currency. The scale is mind boggling.

People need to get prepared because there are economic consequences to the FED’s actions and those consequences are going to be horrific.

DEFLATION TO HYPERINFLATION

Mike believes we are going to have a deflationary dip that is severe as credit aggregates dry up. The world Central Banks will print until deflation gives way. At that point there’s so much base currency in the system, with fractional reserve lending picking up as the public feels good, that it gives way to hyperinflation, even if the Central Banks are not printing.

Just before every hyperinflation in history the economy looks really good, like everything is back on track, and everything is fixed.

We’re in for a rollercoaster ride, but either direction, deflation or inflation, history shows that the only beneficiaries of unstable currencies are gold and silver.

WINNERS AND LOSERS

With inflation you benefit if you owe money, but Mike believes there will be a deflationary dip first because he can’t find an example in history of the public being rewarded for what he calls “mass stupidity”.

Right now we are highly leveraged. If you look at the margin in the stock markets, and you look at the average person, most people have a negative net worth. Really.

Because until you sell an asset, say your house, you just have paper gains or paper losses. Almost everyone carries a debt. Mike carries no debt because he believes there will be a deflationary dip.

In history, whenever the public is all on one side of the boat it capsizes, and it tips to the opposite side of where the masses are positioned.

When you have a nation of savers you go directly into inflation or hyperinflation. When you have a nation of debtors you go into deflation.

Mike sees a rollercoaster.

It’s not going to be easy to navigate, but if you’re armed with some monetary history and economics you’ve at least got a compass.